Warning: S&P 500 A Lost Decade Is Coming | FAST Graphs

[@MrArmanho]

Price is what you pay value is what you get - and this channel is pure value. Thank you Mr. Chuck

[@brandonsmith8017]

Good to hear a voice of reason and rational approach. Thanks.

[@rOHRshackartpottery]

Another great video Chuck and your slogan, “It is a market of stocks rather than a stock market” has been burned into my brain. The problem is when the market like the index tanks, and it will from these heights, the undervalued stocks will tank as well! No one is safe from a major correction and those stocks that are undervalued, in a market correction, will become even more undervalued!

[@jonathanemontgomery]

Appreciate your encouragement and analysis, Chuck

[@aaront1381]

I've learned so much from your videos. Thank you Chuck!

[@ClaireSiconolfi]

Such a great discussion about the difference between the market in general, and the individual stocks that make it. I always learn so much from your videos. Thank you.

[@scottiebumich]

I love this. Thank you! I REALLY wish you offered a student discount price for your Fastgraphs service!

[@FASTgraphs]

Scott: when I created FAST Graphs I insisted that we offer an affordable option. Our basic subscription at $15 a month is a bargain, and about as cheap a resource as you could find. Are you aware that we offer that? Regards, Chuck

[@JamesWhite1]

Any idea when UK / European data will be added. As soon as it is I will be signing up!!

[@monsterboomer8051]

Never. European stock market is extremely fragmented. Therefore collecting data is very problematic. EU ftw LOL.

[@JamesWhite1]

@@monsterboomer8051 haha I figured, maybe just UK stocks would be a win

[@monsterboomer8051]

@@JamesWhite1 UK alone would be possible.

[@mrinternational5494]

Awesome lesson

[@leopfeffer2419]

Thank you for making me look smart, Chuck. I saw a couple of dozen of my stocks in the under 15 P/E group. I always appreciate you validating my confirmation bias ;-)

[@Crappie_Hunter_Seeker]

Great job as usual Chuck !

[@PulverizerA]

@ 12:00 RE: COP/Oil companies in general - COP is going to be making good money with oil hovering around $60 this quarter, as compared to last, when it was around $40.

[@frankszczublewski6638]

Wow! This video is timely, because I recently upgraded to the full version of FASTgraphs and the main reason being to do my own research. Your tutorials support my ability to become a self sufficient investor. A plan I have is to create a portfolio within FASTgraphs of my current holdings. My hope is that I can do similar analysis against what I hold and from that analysis make buy/sell and hold decisions. I would appreciate any suggestions you have toward this plan. Thanks for the video.

[@FASTgraphs]

frank: to supply your common sense and look for the forthcoming FAST Graphs value you Academy. We will be teaching sound investing principles and providing the tools to accomplish it. Will be launching the curriculum soon. Regards, Chuck

[@Blin4ick88]

Chuck, thank you for your work. I have found your channel accidentally and now I am your number one fan from Russia.

[@DimensionRIFT]

Thanks for sharing your wisdom!

[@user-jc1yx9of9p]

Great video on valuation!

[@joelm.7624]

an interesting point to make is that you should nearly 40 companies have a 0 PE right now, doesn't that really inflate the overall P/E of the market? Once this companies go back to having earnings, the PE of the S&P 500 will go to a more reasonable level. still agree that the market overall is highly valued though, maybe not a lost decade but I'm expecting 2% - 4% annualized returns.

[@FASTgraphs]

Joel: I get what you are trying to say. However, the reason those companies have no P/E ratio is because they have no earnings. Technically speaking their P/E ratios are actually infinite not low. Think of it this way, if each of those companies just earned a penny a share instead of losing money then the P/E ratio would be astronomical. So in my view, the 0 P/E ratios actually understate the overvaluation that exist in the market. In other words, the market may be even more overvalued than it appears.

[@SergiMedina]

“Lost” as in low returns for the indexes. But I guess and hope if you invest in good, undervalued business, you will do just fine...

[@rjw6487]

You are a great teacher!

[@jonbettis]

With all those stocks having a 'zero' PE, would the S&P 500 have an even a higher PE when those stocks start having earnings?

[@FASTgraphs]

Jon : It would depend on how much earnings they start generating. When and if many of them start making money they could have very low PEs or very high, again depending on how much they earn relative to how the market prices them. Regards, Chuck

[@leopfeffer2419]

Only higher earnings from the companies with very large market caps would make a noticeable difference in such a heavily weighted index.

[@yentl1986]

How do you feel about the equal weight s&p?

[@FASTgraphs]

Barry Mahlberg: Thanks for the question , to me, the weighting matters not nearly as much is the valuation.

[@drgoldfinger89]

thank you for the video. right now i am at 15% cash and was worrying what to buy next.

[@ejordan74]

Thank you so much!

[@ejordan74]

I'm an investing neophyte and your channel and this tool have been a Godsend. Used this video to create a stock screen in my Fidelity account yesterday and after doing further research on those results, opened a position in IMKTA this morning and will increase my position in APAM. Debating AL, but haven't decided yet. I'd love your thoughts on TRTN; they look really strong since merging in 2016 and positive forecasts for the next couple years from what I can see, but like I said, I'm a neophyte! Thanks, Chuck!!

[@chuckdiezel7652]

I use that portfolio tool at least monthly to look at high earnings yield stocks. I just took a small position on VTRS it seems too cheap to pass up especially if they actually do declare a dividend. Thanks Chuck for another great video!

[@Ryutin18]

Thanks for the great work!

[@WiseOwl_1408]

Chuck is a based legend. He has the EYE 👁️ 💰💰💰

[@Mondknall]

Hmm. There are a few really good companies in that list. But the majority of those companies in the list has serious problems. Which seems logical if you are a company in the biggest bull market ever and not participating in it. Many of them are cheap for a good reason and are in decline or stagnation.

[@FASTgraphs]

Mondknall: Thanks for sharing your viewpoint, however, I must respectfully disagree. There may be a minority of the hundred plus companies that I talked about that have serious problems , but the majority do not. Most importantly, many are not in decline or stagnation, in fact, in many cases their growth is accelerating. So in closing, you are partially correct on some of those names, but I believe the majority are excellent research candidates with bright futures and extremely low valuations. Therefore, I for one am confident will be no lost decade for the majority of them. Thanks again. Chuck

[@Mondknall]

@@FASTgraphs Many thanks and fair enough. I really enjoy and appreciate your work. Though I don't fully support your (in my opinion) a little too conservative value approach, I still like to grab a bargain from time to time, like defense stocks a few months ago. What I would be interested in - considering that the average p/e of the highest quality stocks in the market has been more like 18+ on average for the last 15-20 years instead of 15-16 in the decades before. Wouldn't it make sense to grant the market that the new normal average today is a bit higher than in the past? Considering there are no alternatives any more and also that the market already has been higher on average than in the past. And for a very long time too.

[@akr3574]

Chuck is like that professor at the college all the students loved listening to!

[@joelm.7624]

question - what is your suggestion for us investing in a 401K with no stock options? I also have no value fund option, should I just start allocating to bonds and wait for a crash?

[@urbanart7325]

Stay aggressive if you are years away from retirement and don't time the market. I suggest that you just invest in a Target Date fund sleep peacefully

[@urbanart7325]

I appreciate your analysis but there is too much discussion about past results. If I think about the IFS I would get depressed

[@urbanart7325]

Keep your investment simple unless your plan to spend time reviewing your portfolio every day or week. Waste of time

[@urbanart7325]

I learn that I lose money when I purchase individual stocks

[@martindolinsky1118]

Good late evening, i really appreciate all of your work Chuck, thanks for (basically) everything. Im 18 and already investing in stocks for the long run. I hope (if successful) pass the knowledge you have been giving me for the past year or so. I would love to ask about growth stocks in the field of vegan foods and beverage industry, likes of BYND... thank you and good night:)

[@ScornfulGreedCR]

So? Started investing when I was 15, 5yrs ago. Dawg ain’t nobody care how old u started investing lol

[@martindolinsky1118]

@@ScornfulGreedCR thanks for your opinion, even though it didn't bring any positivity around here

[@j.c.2973]

@Martin Dolinsky It’s remarkable that you’re already investing at only 18 y/o. Congratulations Martin!

[@marksoberay2318]

It seems like we are due for such a huge correction soon, but no one believes it... Index index index is the overwhelming advice...

[@Shvabicu]

buy puts if you're so sure

[@marksoberay2318]

@@Shvabicu i sell calls against leaps

[@MrTedTederson]

If its a lost decade growth wise wouldnt that lead investors to dividend stocks figuring they may as well look for dividends and grow their portfolios that way ? But then the increase demand for the dividend stocks would thereby cause the share prices to increase.

[@FASTgraphs]

Chris: In my opinion, you are describing what has happened. But the important distinction is between market value which is sentiment driven and intrinsic value which is fundamentally based. Sentiment is ephemeral while fundamentals are enduring.

[@greylion629]

More great content. Must see videos every time.

[@joeri2499]

Great video, I really like that you upload often now. I bought MRK yesterday, will add on dips. Sold my shares about 18 months ago and I feel this is a good price to get back in. Pharma stocks are a good value now I think. Also long ABBV, PFE and looking at AMGN.

[@svenhonkomp749]

I cant help me. But why in the World you have only 19000 subs....... This content is so good that it cant be ignored by Investors.Stunning to me People dont see it.

[@FASTgraphs]

Sven: thanks for that vote of confidence, we are just starting. Chuck

[@ariesstark5840]

I agree. This man is full of wisdom.

[@JamesWhite1]

I hope the subs goes down ideally to just me and every other investor ignores Chucks approach and knowledge so I can keep the juicy gains to myself :) don't want everyone jumping on this sensible approach and blowing for us! :)

[@svenhonkomp749]

@@JamesWhite1 hey fool lol, Dont think you gain with thoose Stocks alone dont be that Selfish Rofl^^

[@JamesWhite1]

@@svenhonkomp749 haha very true 👍

[@tassv5909]

Great video once again. A question: Do you not think that even high quality undervalued stocks will fall if and when the entire market falls, giving an even cheaper entry opportunity for people with cash at the sidelines?

[@szaky7399]

Chuck what do you think if VIAC? PE of 10.67

[@dividendgrowth]

Last year, energy sector has some monster write offs due to oil price collapse, and that's how you get that 96 PE for XOM. But this year, with oil price making a full comeback and oil companies having down lots of cost cutting, their earning will SKYROCKET! Same with Disney, don't you think millions of people are going to have some serious revenge consumptions after beating COVID? Disney's theme parks can hike their prices by a lot and still be totally packed. Analysts could be way too conservative in estimating its earnings over next couple years. Amazon has number 2 weight in the index, and this is a company even you said many times that shouldn't be valued on earning, but on cash flow. Its current 90 PE is certainly doing no favor to the overall index valuation. So, how about look at S&P 500 valuation in terms of price/cash flow?

[@FASTgraphs]

Lord Awesome: I do agree regarding the energy sector. and, to a limited degree I agree with Disney. However, in Disney's case I do not believe that recovery earnings growth can justify today's excessive valuation. Finally, I agree that Amazon with its enormous growth justifies its current valuation. thanks for sharing your views, Chuck

[@wensunkeh2030]

Thanks, wondering when this version of FAST GRAPH when will it be available？

[@FASTgraphs]

Wensun Keh: we hope to be launching sometime in May if everything goes well.

[@svenhonkomp749]

For me so hard Invest more in Stocks now.There are not that many.... Bristol or Viatris will be my next Invest.I will check....but most likely it will be Bristol.

[@photomanual01]

PFE has announced they are cutting their dividend to pay the Viatris dividend, and will slowly grow the PFE dividend in the future. Do you still like Pfizer as a dividend growth stock for the future?

[@jepadelmonton4349]

Really, really good!!

[@lgccrab]

In the current stock market environment, are you waiting for a market pullback before initiating new positions? How much weight do you give to the overall trend of the market before buying a "value" stock?

[@FASTgraphs]

Gedi: Thanks for the question. The short answer is no I am not waiting for a market pullback. Instead, I am looking for value within the current market. This is what I mean when I say it is a market of stocks not a stock market. Stated differently, I invest in the specific business not the market.

[@rahulparikh6183]

This is awesome thank you so so much!

[@Anonymous-ld7je]

Disagree, corporate earnings will continue to grow and so will the market. The earnings recession has already ended, and we will know that when Q1 earnings are reported over the coming weeks. Do elevated current valuations mean that the next decade of returns will be below average? Yes, that is highly likely. However, considering the incredible run up in the market since 2008, a 4-5% annualized return for the next 10 years would be not a "lost decade", it sould simply be a reversion to the mean, and put us right back on track with the past with the average return of the past 100 years. Anyone that doesn't agree can feel free to collect their .05% interest on their savings account, or dip into real estate or cryptocurrency, which are both currently in complete bubble territory and so stretched in value that they are 10x riskier than stocks right now in my opinion.

[@FASTgraphs]

Anonymous: thanks for sharing your view. I agree that earnings will continue to grow, but I do not agree they will growth to the extent that they support current valuations. I do agree there's no money to be made in fixed income. And I do agree that people can make money owning stocks if they invest in the right ones. However, regarding the S&P 500 I respectfully disagree. There will be a lost decade for the index in my humble opinion.

[@davidherman1041]

Chuck:. Your data and analysis is above reproach. However, is it a fools game on my part to try and ascertain how unprecedented fiscal and monetary policy will impact valuations?

[@FASTgraphs]

David: I think I understand what you are suggesting. However, I see a distinction between market price an intrinsic value. Emotions determine market price in the short run, earnings determine market price in the long run. Frankly, I would fear that fiscal and monetary policy will inevitably lead to inflation which will likely hurt market prices. But price and value are not the same. So yes it may affect stock prices, but valuations are based on fundamentals. Stated succinctly markets often misappraise the true value of stocks.

[@davidherman1041]

@@FASTgraphs I remember u talking about false profits in one of your earlier videos. The difference between price (perhaps inflated by gov policy) and value as determined p/e, growth, eps, and other pertinent vdata pts.

[@whisper1736]

Great explanation. Value on the long run is what matters.

[@clownanaround7996]

Chuck. Great video

[@Reathety]

Just one lost decade?

[@danhanson9101]

Great video! Another posting idea might be to compare the different index's (s&p 500, NASDAQ, Russell 2000, etc).

[@brijeshkukreja7411]

Hi Chuck, great video and you are the best as always. I did like your video and your work is excellent! However I wasn't able to clearly see the 130 stocks that you were showing with EPS, earnings yield dividend table etc. Can I request if you could put that table in xls and post it here?

[@puppypuppy1448]

What is this mentality that other people should do YOUR work for you, free of charge? You don't think Mr. Carnevale is already busy enough and needs to add YOUR homework to his task list? You evidently have Internet access. Create the list yourself. The data and screening tools are widely available. Or get a better monitor and/or higher quality Internet service. The rest of us had no problem reading the stock names and tickers.

[@nospeedlimit4058]

tommorow

[@paulsommerhalder9049]

LKQ...a chain of automotive junkyards? Picking parts out of junked cars with a world going green. Charts are nice, but fundamentals do matter.

[@carlosg.125]

It's the graham aproach and it's fair enough. Dont mean that "Growth at reasonable price" aproach is not complementary to graham like Chuck showed in previous videos. Chuck can you check nasdaq with Garp aproach? Thank you and my portfólio have a lot of companies you mentioned as well Garp stocks (following lynch valuation)

[@franciscomachado6274]

Thank you for the video, Chuck! Isn't it important to adjust what a reasonable P/E is depending on sector? Do you believe for example that the main stocks in the tech sector will one day return to 15 P/E or will their fair value be more likely shown by the blue line as people pay more and more for them over the years? (thank you. I'm not currently subscribed to fast graphs but will get monthly subscription again when i can)

[@FASTgraphs]

Francisco: it all relates to how fast the company grows. Due to the power of compounding, extremely fast-growing stocks do, will and should command a higher P/E ratio (valuation). The15 P/E ratio more aptly applies to average or normal growth. FAST Graphs automatically adapt our valuation reference lines depending on growth rate. Regards, Chuck

[@HectorVegue]

"Valuation matters, and matters a lot" Chuck Carnavale

[@ericaltamura2124]

Can we get this on a t-shirt?

[@DividendDogo]

This is the most underrated channel in the finance community on KZbin. This channel should have a million subs....

[@porcorosso6082]

I think you pay too little attention to Revenues and Debt. A lot of companies boost eps by increasing debt (pepsico or coca cola for example). Flat revenues for 10 years and increasing debt is a no go in my book-

[@puppypuppy1448]

As Chuck has stated perhaps 1,000,000 times in his videos and writings, screens like this ARE JUST A STARTING POINT. For any candidate, you then need to exercise DUE DILIGENCE and INDEPENDENT JUDGMENT. If you don't like Chuck's screening and/or instructional techniques, you can create your own, make videos about them, and improve the world by teaching others the "right way" to do it.

[@FASTgraphs]

porco rosso: Thanks for sharing your view. However, with all due respect, you think wrong. I pay attention to all metrics including revenues and debt. FAST Graphs via FUN Graphs (fundamental underlying numbers) has extensive historical data on both revenues and debt. Additionally, we offer price to sales valuation ratios and graphics. These videos where I am covering a lot of stocks at one time are simply overviews. Nevertheless, they are the 1st step prior to a more comprehensive research and due diligence effort which I wholeheartedly endorse and support. Regards, Chuck

[@FASTgraphs]

@SubKom but yet my dividends keep rising and the checks clear.

[@zgreg427]

Valuation is useless when you are not comparing to risk free rate at the given time

[@FASTgraphs]

Greg:I respectfully disagree. Price is what you pay value is what you get. Value reflects the amount of cash you are receiving regardless of exogenous forces.

[@precociousdeathdealer202]

I hope stock and housing crashes 90%. I'm 25 so I can handle it and buy the dip. Sick of financial repression

[@Shvabicu]

you had your chance last year when global markets crashed 40%

[@dividendgrowth]

In the age of share buybacks, Book Value is meaningless. PM International, a top value stock, has negative BV because of share buyback; On the other hand, Lehman Brothers had a BV of 0.1 before it filed bankruptcy in September 2008

[@FASTgraphs]

Lord Awesome: Regarding PM international, they have not bought any stock back since 2014. It is their debt that has caused negative equity.

[@brianegeberg8497]

I keep hearing this same theme of overvalued indexes. One question I have is with all the stimulus, the infrastructure bill, the enormous amount of cash folks have and the economy heating back up driving profits up (possibly) I wonder if a new normal P/E for these indexes is higher than 15 being driven by this newer breed of tech stocks that have outsized all other stocks.

[@FASTgraphs]

Brian: the only companies that command a higher P/E than 15 are companies that grow faster than 15%. The P/E ratio is simply a metric that majors earnings yield. When growth is not high, a higher P/E ratios simply mean that your earnings yield is inadequate(2 low) to compensate you for the risk you take. It is a timeless principle and not something that changes. In short, I respectfully submit, that there is no such thing as a new normal valuation. Value is functionally related to the amount of cash the company generates. Regards, Chuck

[@larrymelman]

Oh, for the love of Pete. "D. R. Horton." Say it with me. "D. R. Horton." Not "D. H. Horton." Not "Doctor Horton." "D. R. Horton". An investing professional who doesn't know the names of the S&P 500 companies, I cannot really take seriously.

[@FASTgraphs]

larrymelman: over the love of Pete that is what you got this video I inadvertently mispronounced D.R. Horton.LOL

[@larrymelman]

@@FASTgraphs Not inadvertent. Also in the "Principles of Keynes" video last week. I figured two screw-ups in a row, deserved pointing out. You're welcome.

[@puppypuppy1448]

But you CAN take "really seriously" someone who hides behind the name of a former pseudo-celebrity while cutting down a contributing member of society's honest effort? Give us a break. Go away. And Calvert DeForest died well more than a decade ago. en.m.wikipedia.org/wiki/Calvert_DeForest

[@larrymelman]

@@puppypuppy1448 Look, he made a simple mistake. Twice. I pointed it out. (Again, you're welcome.) I don't care if you take me seriously or not. No, I won't go away.